1. The petitioner is the plaintiff, who has filed a suit for specific performance. The plaintiff produced an insufficiently stamped agreement for sale. An objection was taken. The trial Court directed payment of deficit stamp duty and penalty at the rate of 10 times the duty. The petitioner aggrieved by the said order has filed this petition. This case and other cases similarly placed more importantly involve the question of jurisdiction of the Court to levy penalty U/S.34 of the Stamp Act (for short, ‘the Act).

2. The Section 39 of the Act, empowers the Deputy Commissioner to levy penalty of Rs.5/- or in the alternative, the penalty not more than 10 times the duty in his discretion. Whereas, Sec.34 does not endow any discretion, the civil court shall have to levy penalty of Rs.5/- or in alternative 10 times the duty. There is conflict in the provisions regarding discretionary powers of the Deputy Commissioner vis-à-vis the Civil Court. This apparently appears hostile discrimination. In other words, when a party who approaches the Civil Court with insufficiently stamped document the Court could alternatively levy penalty 10 times the duty. But when a person similarly placed, approaches the Deputy Commissioner, he could alternatively levy penalty not more than 10 times the duty. That means he can levy penalty less than 10 times. This apparently suggests hostiles discrimination amongst the defaulters and violates Articles 14 of the Constitution of India. Therefore, the Government was issued with notice. The Addl. Advocate General, Sri. K.M. Nataraj, submitted arguments on behalf of the Government.

3. Section 17 of the Act mandates that proper stamp duty has to be paid before or at the time of execution of the document. However, U/Ss.31 and 32 of the Act, a party can approach the Deputy Commissioner for determination of the proper stamp duty and the Deputy Commissioner, upon scrutiny, shall determine the proper duty payable. After such determination, the party can make good the deficit stamp duty and the Deputy Commissioner would certify that proper stamp duty has been paid thereon. However, U/Ss.31 and 32 of the Act, in order to avoid penalty the party should approach the Deputy Commissioner within one month from the date of execution of the document, if it is executed in India.

4. The relevant provision of Section 33(1), which is germane for consideration in this case, is extracted and its purport and effect is stated hereunder:

“33. Examination and impounding of instruments – (1) Every person having by law or consent of parties authority to receive evidence, and every person in-charge of a public office, except an officer of police, before whom any instrument, chargeable in his opinion, with duty, is produced or comes in the performance of his functions, shall, if it appears to him that such instrument is not duly stamped, impound the same.

The autopsy of Section 33 discloses two kinds of authorities who are entitled to deal with insufficiently stamped documents when it comes to the notice. The first kind of authority is “Every person having by law or consent of parties authority to receive evidence.” This obviously suggests a quasi-judicial authority. The second kind of authority is “every person in-charge of a public office, except an officer of police”. This obviously suggests a public officer dealing with administrative duties excluding exercise of quasi-judicial powers. The Deputy Commissioner is also within the meaning of “every person incharge of public office”, when the insufficiently stamped document comes to the notice, they have power of impounding the document.

5. Section 34 and proviso (a) which is relevant and germane for consideration in this case is extracted and its purport and effect is stated hereunder:

34. Instruments not duly stamped inadmissible in evidence, etc. – No instrument chargeable with a duty shall be admitted in evidence for any purpose by any person having by law or consent of part